Manitex dips 35%
Manitex, owner of PM articulated cranes, Manitex boom trucks, Oil & Steel platforms and Valla pick & carry cranes, has reported its second quarter results.
Total revenues for the six months to the end of June were $85.8 million, down 23 percent on the same period last year. At the same time last year’s pre-tax profit of $4.6 million was converted into a loss of $9.4 million this year. The backlog/order book at the end of June was $44.3 million, down 17.5 percent on last year, however by the end of July it had recovered to $48.4 million, with half of the backlog made up of PM loader cranes. The company did manage to reduce net debt from 41.3 million last year to $34.4 million as of the end of June by paying down its European debt at a discount.
In the second quarter revenues were 35 percent lower at $37.1 million, with a pre-tax loss of $3.1 million compared to a profit in the same quarter 2019 of $3.7 million.
Chief executive Steve Filipov said: “We continue to implement safety protocols globally to protect our employees and their families during the current Covid-19 pandemic, including increased frequency of cleaning and disinfecting, social distancing practices, and other measures consistent with specific regulatory requirements.”
“Performance for the second quarter was negatively impacted by lower production and increasing uncertainty, as a result of the continuing pandemic, of the future demand picture in certain geographic markets. Covid-19 forced closures at PM and also impacted our dealers and customers, globally. Notwithstanding this disruption in the marketplace, we have seen consistent improvement in our results in international markets for articulating ‘knuckle boom’ cranes and truck mounted aerials, particularly in Western Europe and Asia where we are pleased to be establishing PM, PM-Tadano, as developing brands in the global marketplace that we estimate at over $2.3 billion annually. Sales and orders at PM, combined with declines at Manitex straight boom cranes, have resulted in a higher backlog composition of PM over Manitex for the first time ever, a trend that we anticipate to continue, consistent with our strategy to focus our resources there and grow the business to a much higher level over time.”
“While we have reported a loss for the second quarter, on a level of sales that reflect the temporary economics of a global pandemic, we generated $4.6 million in cash from operations, and we continue to take aggressive steps to reduce costs and improve our balance sheet. In this regard, we also paid down a portion of our European debt at a 15 percent discount of its face value, subsequent to the quarter’s close.”
“Going forward, our focus will be on right sizing our business to meet market demand, margin preservation, and generating cash from operations. To that end, we implemented headcount reductions and restricted production schedules in North America during the first half of 2020, and we continued this process further in the third quarter. We expect to generate an additional annualized savings of approximately $5.4 million from these actions. We are preparing for lower demand, exacerbated by the pandemic, which may persist throughout the year, particularly in the Manitex straight mast crane side of the business. We anticipate continued modest growth at PM, and hope to close out the year with Covid-19 behind us, with PM on pace to reach sales levels not seen since the last uptick in global equipment sales, continued joint sales with our partner, Tadano, and a stabilisation of demand in North American crane markets.”
All things considered this is not such a bad set of numbers from Manitex, a particularly positive aspect is how fast the PM business is bouncing back, with plenty of further growth potential ahead. The Oil & Steel product line also has a great deal of upside potential if the company can continue its product and production improvements and step up its international sales and marketing efforts.